$100 million Verizon settlement payments go out, but in amounts much less than expected

Some Verizon customers may have woken up to automatic payments into their bank accounts as part of a 2024 $100 million class-action settlement.

But the actual amount deposited may be much less than many expected.

The lawsuit, first announced last year, claimed Verizon charged certain account holders a "monthly administrative charge" or "telco recovery charge," which was "unfair and not adequately disclosed."

The cell carrier denied any wrongdoing and said the suit had no merit, according to the settlement site.

"Verizon clearly identifies and describes its wireless consumer Admin Charge multiple times during the sales transaction, as well as in its marketing, contracts and billing," Verizon told NBC Chicago in a statement at the time. "This charge helps our company recover certain regulatory compliance, and network related costs. As always, our Company stands committed to transparency and the clear disclosure of all consumer charges and fees."

According to the settlement website, customers who were eligible for a payout were notified by mail or email as they were identified by Verizon and included "all current and former" individual account holders who were charged the fee between Jan. 1, 2016 and Nov. 8, 2023.

Claims were due April 15, 2024, and the settlement was deemed effective Sept. 20, 2024, the site said, with payments expected to begin distribution in January of 2025.

The settlement website stated that payments of $100 were expected, with eligible claimants getting a minimum of $15 for their account plus $1 for each month they were charged fees.

How much were payouts?

Some users confirmed to NBC Chicago Tuesday that they had received automatic payments from the settlement via Zelle or Venmo. However, the payments were significantly less than expected, with one amounting to $5.33.

Others took to social media to say they too had received payments in lower amounts.

Why were payments lower than expected?

The settlement website also stated final amounts may be lower, depending on how long claimants were Verizon subscribers, and how many people filed valid claims. The site also stated that if the Settlement Fund is not sufficient to pay all the filed valid claims after deducting court costs, attorneys fees and incentive costs, payments to class members would be "decreased from the initial allocated amount of a pro-rata basis."

According to court documents, payments began distribution to approximately 5.2 million class members Jan. 6, 2025. Payments were originally set to go out in early December, but were rescheduled for January due to the winter holidays, court documents showed.

Court documents also showed that attorneys fees and costs totaled $33.3 million, or 33 percent of the $100 million settlement fund. The settlement also included 129 plaintiffs earning $3,500 each in "incentive awards" as part of the settlement, court documents showed.

The settlement administrator did not immediately respond to NBC Chicago's request for comment.